Senator Milne says she supports New South Wales Liberal Senator Bill Heffernan's calls to expand the mandate of the Foreign Investment Review Board to cover the sale of agricultural land and associated water rights to overseas investors.

"I think there is a role for the Foreign Investment Review Board to look very carefully at foreign investment in agricultural land. After all, a lot of countries around the world do not allow foreign nationals and foreign corporations to actually buy the land. They allow leasehold arrangements and joint partnerships, but they don't allow outright purchase," Senator Milne said.

But the Greens say the FIRB can't be expected to take a view on whether overseas investment proposals involving Australian agricultural land are in the national interest, in the absence of a national food security plan.

"We have a huge obligation to invest in food security, not only for Australia's sake but for the world's sake, otherwise we will be seeing food riots (and) insecurity right through Asia and our nearest neighbours."

"That's what the Greens want to see happen," Senator Milne said. "We need to have an assessment of where we are currently growing our food."

Senator Milne says such a plan would take into account the vulnerability of food-growing areas to climate change, the need for more water to go back into river systems to provide ecological sustainability, and investment in agricultural science research.

"We need to look at where we can grow food into the future and protect that land for food production," Senator Milne said. "If we see it go under housing, or if we see it go under fuel crop production, then we are really failing ourselves. But we are also failing the rest of the world, because we do have a capacity to produce more food than we can use."

Senator Milne says Australia is seeing more and more agricultural land across the eastern states being given over to coal mining or coal seam gas.

"At some point someone has to say: ‘Where is the food going to come from?'," she said. "You can't eat coal."

Senator Heffernan says Australia is not keeping up with the fact that national agriculture policies are beginning to change all around the world in response to climate change and population growth.

"We are in transition now, and the transition is being driven by strategic decisions being taken around the world, looking at the science about changes to the planet which obviously require reconfiguration of the way we're doing business, where we can farm, and where we can't farm," he said.

Water rights

Of particular concern to Senator Heffernan is that under current FIRB regulations foreign companies, sometimes with the backing of sovereign wealth funds, are able to buy the permanent water licences associated with agricultural properties.

"At the present time there's no differentiation between private investment and sovereign investment – in other words other countries' sovereign wealth funds buying our sovereign assets and then excluding us from access to them," Senator Heffernan said.

"We want to be able to strategically use our water to the best advantage."

"We want to be able to strategically use our water to the best advantage."

Senator Heffernan says the FIRB needs to pay close attention to overseas interest in the sale of Cubbie Station, a 93,000-hectare cotton property in southern Queensland.

"I'm not aware of who the owners are for instance of the company that's making a bid for Cubbie Station, which is reliant for a lot of its value on an irrigation water licence that's been issued that's not sustainable.

"It's registered in the Cayman Islands. Well, it would be nice to know who we're dealing with, and at the present time we don't know."

The Federal Government recently offered to buy back part of Cubbie Station's permanent water rights for $50 million.

Last year, Singaporean company Olam International bought almond plantations owned by Timbercorp, which is in receivership. In September, Olam paid $128 million for 8,000 hectares of almond groves at Robinvale that were sold with 41,000 megalitres of permanent water rights. In November the company paid $160 million in cash for a further 3,800 hectares together with 48,000 megalitres.

Olam now controls 45 per cent of the almonds under cultivation in Australia and says it is in the business for the long term.

But Senator Heffernan says the plantations were bought for little more than the value of the water.

"The Singaporean company may do well out of it. I just think we're entitled to know who they are, put it on a register, and take some control of knowledge in the market," he said.

Senator Heffernan says it would be "a serious, serious mistake" if Australia allowed overseas companies to buy up Australian water licences in order to speculate on the water market.

Tasmanian farmer advocate Richard Bovill says Australia has turned water into a tradeable commodity without thinking about the long-term consequences.

We set water up as an asset class no different to buying gold or buying shares on the stock market.

"The Singaporeans have been clever enough to say, look, let's get in on the ground floor and buy Australian water... because in the longer term this is a commodity that is never going to go backwards."

New Zealand's lead

Senator Heffernan points to New Zealand as an example of the kind of response he'd like to see in Australia.

A Chinese company named Natural Dairy Holdings wants to buy up 16 New Zealand dairy farms owned by the Crafar family, whose company is in receivership.

The proposed sale has been put on hold while New Zealand's foreign investment regulator, the Overseas Investment Office, examines it. New Zealand Prime Minister John Key has said sales of "very large tracts" of agricultural land to overseas interests may not be in New Zealand's national interest.

Bill Ralston, a spokesperson for Natural Dairy Holdings, says if Natural Dairy Holdings were to be allowed to buy the farms it would still only be a very small player in the New Zealand dairy industry.

"We are looking at only a couple of hundred million [dollars] - that is, 16 farms out of a total of more than 2,500 dairy farms in New Zealand. It is baby steps for Natural Dairy at the moment."

Mr Ralston says Natural Dairy Holdings is being unfairly singled out because it is Chinese.

"In the last three years, 13 different applications to acquire land have been approved in NZ mainly from Europe, Australia, the US and Russia – something like $380 million worth of acquisitions, and not a dickey bird! The sudden prominence of Chinese investments and the paranoia has set in."

But the Federated Farmers of New Zealand claim the Crafer farms purchase is just the beginning of a massive spending spree. They say Natural Dairy Holdings has $NZ1.5 billion to spend on farm acquisitions, which would mean they had a strategic stake in the dairy industry.